Prospects for PH merchandise exports this year seen bleak
PHILIPPINE merchandise exports may post flat growth this year as the country is expected to take a hit from lackluster global economic conditions.
Even if current conditions improve, the country’s merchandise export revenue may still likely grow at only about 3 to 5 percent this year, slower than the 8 to 10 percent export revenue expansion projected by the government earlier this year, Export Development Council (EDC) executive director Senen M. Perlada said in an interview Fri day.
Merchandise exports slid by 17.1 percent to a record low of $4.9 billion in May this year, the steepest drop since December 2011. For the first five months of the year, exports similarly fell by 5 percent to $23.53 billion.
“We will review our targets because this year, we may post flat growth in exports, or if we can recover, we may likely post 3-5 percent on the positive side. Global demand remains precarious and it’s not as rosy as we expected it to be. Japan is still recovering, China’s manufacturing is still down, and we’re somehow affected by what’s happening in Greece,” Perlada said. “Our (export growth) target of 8 to 10 percent will be too much of a stretch because we have less than three quarters to boost exports. For us to achieve that, growth should be a high double- digit growth. Also, the problem is that the global imports of our major trading partners—such as the United States, Japan, China and even Korea—are still on the negative,” he said.
According to Perlada, the EDC expects non-electronics products to help boost export growth this year, as well as the Philippines’ inclusion in the generalized system of preference schemes of both the European Union and the US.
The EU GSP+ is a preferential trade scheme that allows more than 6,200 product lines manufactured in the Philippines to be exported to the EU at zero duties. The Philippines is currently the only Southeast Asian country accorded with this GSP+ status over the next 10 years up to 2024.
The US GSP similarly provides duty free access to about 5,000 types of products when exported by beneficiary countries like the Philippines.
In a separate interview, Philippine Exporters Confederation Inc. president Sergio R. Ortiz-Luis Jr. said the Philippines would be hard pressed to hit the 8-10 percent export growth target for this year.
“We’re hoping the situation will change but obviously the 8-10 percent goal will be very hard to achieve. To hit that means that we have to grow our exports by 15 percent monthly in the second half of the year,” Ortiz-Luis said.
“The decline in exports in May was totally unexpected but it is because of the weakening in China and problems in Greece. In the past, whenever we had problems in terms of weakening of a key market, somebody else or another market picks up the slack and that was usually China,” he further noted.
The Department of Trade and Industry was earlier banking on the recovery of bigger markets like the United States and Japan and the expected continued growth of the local electronics industry to boost export growth this year.
Apart from electronics, other expected significant contributors to the country’s exports growth were agricultural products like coconuts and pineapples, automotive parts, as well as mining (copper and nickel). Outbound shipments of electronic products, agro-based goods and minerals, however, fell in May.
